The three most powerful candlestick pattern 

Technical analysis is one of the most effective ways to find quality trades. Though fundamental and sentiment analysis is also very important, many retail traders are making a consistent profit using technical analysis. Executing quality trades based on technical data is really simple but you must know the proper way to find the very best trades. If you use an indicator based trading system, chances are high you will not be able to find good trades. Indicators, EAs, and robots are nothing but helping tools. In fact, the smart Singaporean traders prefer to trade the raw price data since it significantly improves their win rate.

Today we are going to discuss the three most powerful candlestick pattern in price action trading strategy. These are: 

 

  • The bullish morning star
  • The bearish evening star
  • Doji

Image result for candlestick pattern

 

The bullish morning star pattern

The bullish morning star pattern is a bullish reversal signal formed usually at the bottom of a downtrend. The experienced traders use it to ride the newly formed bullish trend. However, this pattern is also found in the middle of a bullish trend which acts as a trend continuation signal. After an extended bullish rally, the market starts its bearish correction. Once the market completes its bearish correction, it usually forms bullish morning star pattern at the support level, indicating the bulls are again going to push the price of a certain asset higher.

The bearish evening star

The bearish evening star is a bearish reversal signal formed at the end of an uptrend. The experienced traders in the exchange traded funds industry uses it to short a certain pair. Just like trading the bullish morning star pattern, you need to wait for bullish correction of the market to ride the bearish trend. On the contrary, if you want to trade the major trend reversal, make sure you are using the pattern in the higher time frame. Try to be a conservative trader to earn more money.

Doji

Doiji usually refers to indecision. Almost every trader uses the doji to find the potential price movement of a certain asset. Once you spot a doji in the higher time frame, make sure you wait patiently for the next candlestick. A doji followed by a strong bullish candle usually indicates the bulls have taken control over the market. On the other hand, a doji followed by bearish candle represents, the bears have taken control of this market. So, if you can identify the doji properly, the chances are high that you will high quality trades.

Real-time trade execution

The moment you start to trade the market with the Japanese candlestick pattern, it’s highly imperative you trade with the professional brokers like Saxo. They offer premium trading platform like SaxoTraderGo which helps traders to find real-time price feed. You can’t trade the market successfully by using a low-end trading platform. Start thinking like the professional traders and execute trades with high-end brokers.

Managing your risk factors

By using the three most powerful candlestick pattern you can easily find great trades. But does this mean you take a huge risk? The simple answer is no. Even the best trading system in the world often generates consecutive losing trades. So, if you fail to trade with proper risk managed, you won’t survive in the trading business. At times, you might get confused with the market dynamics. During such a time it’s better to stay in the sidelines. 

Never trade the market unless you have a clear trade setup. Always try to find a high-risk reward ratio in each trade since it will help you to deal with the losing trades. Think about long term consequence in the trading business. Analyze the important variables and try to reduce your risk exposure in every possible way. Join the professional trading network and see how the experienced traders execute trades in the real market.

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